Revision boosts Loudcloud results

Analyst's change puts company ahead of estimates

By

BarbaraC. Costanza

SUNNYVALE, Calif. (CBS.MW) -- At first glance on Tuesday, Loudcloud's earnings appeared to have missed Wall Street's expectations. But by Wednesday morning the Internet services company was ahead of estimates thanks to what appears to be an after-the-fact change by one analyst.

Loudcloud reported a loss of $60.3 million, or $1.25 a share, which compares to $58.8 million, or $1.90 a share in the fourth quarter of fiscal 2001.

Previously, the five analysts polled by First Call/Thomson Financial expected Loudcloud
LDCL
to lose an average of $1.21 a share in the quarter ended April 30, with estimates ranging from a loss of $1.03 to a loss of $1.25 a share.

So at first the company seemed to have missed by 4 cents.

But according to First Call, one analyst sent in a revised estimate on Wednesday morning, Research analyst Ken Perkins said the analyst revised his estimate for the already-announced quarter to include deferred compensation. That led First Call to change the per-share estimate to a loss of $1.30 a share. First Call would not name the analyst who made the change

Loudcloud spokesperson Scott Kupor said the change came from David Readerman, analyst for Thomas Weisel, who changed his estimate to include deferred compensation because other analysts had factored it in.

But according to a spokesperson at Thomas Weisel, Readerman didn't change his estimates prior to or after Loudcloud reported.

Initially, Kupor had said the First Call estimate was off because was based on an incorrect amount of shares outstanding.

So now the company beat the estimate by 5 cents.

Shares were last trading down 20 percent to $2.70.

Looking ahead, the company said it expects revenue of around $14 million in the second quarter, along with an EBITDA (cash flow) loss of between $33.5 million and $34.5 million and a one-time charge of $25 million to $28 million to reflect restructuring announced May 1.

For the entire fiscal year, Loudcloud predicted that revenue would range from $53 million to $57 million, the EBITDA loss would total between $129 million and $132 million, and that capital expenditures would come in at $17 million to $18 million. At the end of the year, Loudcloud estimated that it would have a cash and cash equivalent balance of about $110 million.

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